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tr88frog
New Member

Why are long term capital gains included in my taxable income if the tax rate on CG is 0% ?

taxable income = $92000 on joint return.  the $92000 includes $10000 of long term capital gains which was entered on line 13 of 1040.

thanks all.  by consulting the tax tables for 2017, I can see TurboTax calculated taxes based on $82000 +/-.  so the CG were not taxed.  

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4 Replies

Why are long term capital gains included in my taxable income if the tax rate on CG is 0% ?

The gains would be shown on your tax return regardless of whether the tax rate is 0% or higher. The tax rate on capital gains is determined by adding the capital gains to your other income and determining what the tax bracket is with the total. Your tax bracket may be 25% with $92,000 of total income which would make some or all of your capital gains taxed at 15%. 

Why are long term capital gains included in my taxable income if the tax rate on CG is 0% ?

Review how the income was being taxed  on the Quailifying Dividends & Cap Gain Worksheet ... they are not calculated in a vacume ... the rest of your income is taken into account as well.

Why are long term capital gains included in my taxable income if the tax rate on CG is 0% ?

if you have capital gains or qualified dividends the tax on line 44 is not taken from the tax table but is calculated separately from schedule D.  The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet.  It does not get filed with your return.  In the online version you need to save your return as a pdf file and include all worksheets to see it.  

Why are long term capital gains included in my taxable income if the tax rate on CG is 0% ?

and State taxes may be different.
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